Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Germany’s financial watchdog BaFin has imposed a record €45mn fine on JPMorgan Chase for shortcomings in its anti-money-laundering controls.
JPMorgan’s Frankfurt-based subsidiary, from which it runs its wider European business, was found to have “systematically” failed to file suspicious activity reports on time between October 2021 and September 2022, BaFin said on Thursday.
JPMorgan has grown to become Wall Street’s biggest bank, with an $850bn market capitalisation that exceeds that of its rivals Bank of America, Citigroup and Wells Fargo combined.
The BaFin penalty relates to weaknesses in the bank’s internal oversight processes for detecting and reporting potential money laundering or terrorism financing transactions. BaFin said the size of the fine reflected the scale of the breaches as well as JPMorgan’s size.
It is the largest fine BaFin has issued against a bank to date, as the regulator seeks to take a tougher stance on compliance and reporting failures. The previous record was a €40mn penalty levied on Deutsche Bank in 2015 for similar shortcomings.
“The fine relates to historical findings and the timing of our Suspicious Activity Report filings did not impede any investigations by the authorities,” JPMorgan said. It added that the bank was “deeply committed to detecting, preventing and reporting money laundering and financial crimes”.
People familiar with the bank’s processes said JPMorgan had since overhauled its systems and tripled the number of people in its financial crimes compliance unit compared with 2021.